The 2007 Medicare Trustees Report was recently released, and it predicts payments to physicians will be cut by 10 percent in 2008 and by about 5 percent for each year from 2009 through 2016 without intervention by Congress.

Over a ten-year period, the cumulative payment reduction is expected to be 41 percent, while physicians’ costs are expected to increase by 20 percent. The report further projects the portion of Medicare covered by general revenues will exceed 45 percent by 2013, which, under legislation passed in 2003, will trigger a funding warning and Presidential response.

The current Administration has already indicated it will respond to a funding warning by requesting Congress make across-the-board cuts in payments to other Medicare providers and raise the share of premium costs paid by high-income beneficiaries.

The American Medical Association (AMA) has called for congressional action to prevent the payment reductions for 2008 and for Congress to adopt the MedPAC recommendation to level payments for traditional Medicare and Medicare Advantage.

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